Qatar’s Gas Empire Under Fire
Qatar’s natural gas exports have come under fire due to criticism and physical attacks, resulting in a significant loss of its LNG export capacity. The immediate impact has been a loss of approximately 17% of its LNG export capacity, which translates to around 1.6-1.8 Mt/week. This has led to a surge in European gas prices, with a rise of more than 80%, and Asian spot LNG prices increasing by approximately 35%.
Revenue Projections
The loss of Qatari LNG is expected to result in a revenue hit of around $12 billion. Additionally, potential EU penalties and supply cuts could lead to further losses of $9-12 billion. The delayed expansion of the North Field project could also defer $15-20 billion of incremental revenue.
Market Dynamics
The global LNG market has become tighter due to the loss of Qatari LNG, with the forward curve indicating a year-on-year decline in total supply for 2026. This has prompted buyers to turn to U.S. and Australian exporters, mitigating some of Qatar’s lost market share.
Strategic Leverage
Qatar’s public threat to withhold European supplies gives it bargaining power in the EU-CSDDD negotiations. However, it also risks long-term reputational damage and the loss of long-term contract renewals.